Accounts must be unfrozen, while disputed cyber-fraud sums remain in fixed deposits pending Magistrate’s orders.

The petitioner, Shyam Fashions, through its proprietor Yogesh Sharma, maintained Current Account No. 20100028376823 with Bandhan Bank Ltd.

The account was placed on hold/frozen pursuant to information or directions allegedly received from cyber-crime authorities in connection with a disputed amount of ₹7,000.

The petitioner invoked Article 226 of the Constitution seeking removal of the freeze/lien and permission to operate the account.

The Court noted that the matter was squarely covered by Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, decided on 26 April 2024, where similar bank-account freezes based on cyber-crime communications had been considered.

Whether the petitioner’s bank account, frozen pursuant to cyber-crime agency communications, should remain wholly frozen or be unfrozen subject to preservation of the disputed amount of ₹7,000.

Whether the disputed amount should be retained in a fixed deposit pending lawful action and orders of the competent Judicial Magistrate under the applicable criminal-procedure law.

The Court applied Article 226 of the Constitution, under which the High Court may issue appropriate writs and directions to protect legal rights and prevent arbitrary State or institutional action.

It followed the principle laid down in Malcolm Murayis & Ors. v. State Bank of India & Ors., W.P. No. 1100 of 2024, that where a bank account is frozen at the request of cyber-crime authorities, the entire account need not remain blocked; only the amount linked to the alleged cyber fraud may be secured, ordinarily through a fixed deposit, pending orders of the competent Judicial Magistrate.

The Court also relied on the requirement that investigating agencies proceed in accordance with Section 102 of the Code of Criminal Procedure, 1973, or the corresponding applicable provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023, and obtain appropriate judicial orders concerning seized or disputed property.

The Court found the petitioner’s case materially identical to Malcolm Murayis and therefore applied that decision mutatis mutandis.

Since the cyber-crime authorities had identified only ₹7,000 as the disputed amount, a complete freeze of the petitioner’s account was considered unnecessary.

The Court balanced the investigative interest in preserving the allegedly tainted amount against the petitioner’s right to operate its business account by directing the bank to place ₹7,000 in a fixed deposit.

Liquidation of that fixed deposit was made conditional upon orders of the competent Judicial Magistrate within three months, thereby preserving the amount for lawful proceedings.

The Court further held that the remaining balance was not required to remain frozen and should be released for the petitioner’s use.

Bandhan Bank was directed to unfreeze the petitioner’s bank account, while keeping ₹7,000 in a fixed deposit.

The fixed deposit could be liquidated only pursuant to orders of the competent Judicial Magistrate within three months; failing such orders, the amount could be released to the petitioner under intimation to the police agency.

Any remaining amount in the account was directed to be defreezed and made available to the petitioner.